The ACT government is taking legal action against development giant Geocon for "false and misleading" marketing material relating to its Grand Central Towers project.
ACT Fair Trading commissioner David Snowden disputes the developer's claims that stage two of the Canberra light rail would stop at or close to Grand Central, and that travel time from Woden Town Centre to Canberra city on the light rail would be under 10 minutes, with services running every five.
If false and misleading marketing practices are proven, penalties of up to $10 million could apply. The case is before the ACT Supreme Court.
"Living in Grand Central Towers and being able to walk out the front door, and jump on the light rail and be in the city in under 10 minutes, every five minutes, is an extraordinary opportunity for Canberrans," Geocon chief executive Nick Georgalis said in a marketing video in March 2018.
The government alleges that, at the time of the video, stage two of the light rail was yet to be approved, and the route and location of stops finalised.
The estimated travel time between Woden Town Centre and Canberra city was between 25 and 30 minutes and the frequency of services had not been determined.
But Geocon and developer Zapari, which is also being taken to court, say the notice of decision for the project advised there was a proposal to extend the light rail to Woden, with a terminus on Callam Street. An extract from the document, obtained in January 2018, says the advice was received from Transport Canberra Light Rail on January 5.
It also warned the light rail's extension could impact access to the site.
"The ACT Labor government won an election off the back of telling the public that light rail stage two was going to Woden, but Geocon is not allowed to advertise this election winning promise," Mr Georgalis said.
"The only claims that are false and misleading are the claims made by the ACT government in these proceedings and we look forward to holding the government to account and vigorously defending these matters in the courts."
The Property Council of Australia's members - including Geocon - relied on the government's commitment to light rail to make key decisions.
"There is no indication that this project is not going ahead," ACT executive director Adina Cirson said.
Fair trading's allegations mirror Greens MLA Caroline Le Couteur's critiques of the light rail claims in May. "Squabbling over the exact amount of time the light rail will take equates to semantics," Mr Georgalis said at the time.
Minister for Consumer Affairs Shane Rattenbury said it was important to note that the decision to take legal action was made by fair trading as an individual statutory office.
Fair trading also disputes that people would be able to purchase a unit at Grand Central Towers and obtain a 7 per cent gross rental yield from a lessee - an incentive advertised as a "guarantee" on Geocon's billboards, in brochures and on the developer's website.
"The guarantee was subject to terms and conditions that were not disclosed on the billboards or the brochure," a government statement said.
"[Fair trading also alleges] that a 'no reliance term' contained in the standard form contract for sale was unfair and should be voided under the ACL."
Mr Georgalis said rents in Canberra were continuing to skyrocket, and Geocon developed numerous properties in the ACT that were achieving rental yields in excess of 7 per cent. The guarantees ensured its commitment to that outcome.
"Other developers in the ACT ... have provided similar rental yield promises for their projects but the ACT government chooses not to pursue these developers," Mr Georgalis said.
"Pursuing a giant in the industry like Geocon gives a false perception to the community that the ACT government are acting on issues.
"The reality is they are deflecting from much greater problems they are experiencing."
Mr Snowden is seeking declarations, pecuniary penalties, injunctions, an adverse publicity order, and an order for a compliance program and costs because of the marketing.
"This action sends a clear signal that we are actively scanning the market to ensure that representations made to consumers are accurate and not misleading," he said.
In recent years, Geocon has faced intense criticism for "sexist" advertising, particularly for its Tryst development in Canberra city.
Unions ACT started a petition calling for a ban on the ads in March, while Labor MLA Bec Cody described one women's event held by the developer as an "insult to every woman in Canberra".
Geocon has always fiercely disputed the claims. In June, marketing director Melanie Hindson told The Canberra Times the company's advertising was "absolutely" in line with its marketing strategy.
"There's a lot of people and a lot of women that are actually loving what we do," she said.
"We want to push boundaries and be bold."